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On Thursday, RBC Capital analysts downgraded Wizz Air Holdings Plc (LSE:WIZZ) stock from Outperform to Sector Perform, while significantly reducing the price target to £15.00 from £24.00. The decision comes amid expectations of a challenging financial outlook for the airline, which currently has a market capitalization of $2.24 billion and trades at 6.62 times earnings. According to InvestingPro data, the stock is currently trading near its 52-week low, with elevated volatility indicated by its beta of 2.16.
The analysts have adjusted their forecast, reducing the FY26 estimated net profit after tax by 31%, which is 37% below the consensus compiled prior to the FY25 results. This adjustment reflects concerns about the company’s financial performance in the upcoming fiscal years.
In their comments, the analysts noted that Wizz Air’s net debt for FY25 is above their previous forecast. They expressed skepticism about the airline’s ability to realize its recovery potential by FY26, suggesting that investors may require more evidence of improvement.
Wizz Air, a low-cost airline operating primarily in Europe, has faced various challenges impacting its financial performance. The revised outlook and lowered price target reflect these ongoing difficulties.
The stock’s performance on the London Stock Exchange (LON:LSEG) will be closely watched as investors digest the latest downgrade and the implications for the company’s future growth prospects.
In other recent news, Wizz Air has reported a 10% increase in passenger numbers for May, reaching a total of 5.7 million passengers. The airline’s load factor, which indicates how full flights are, improved slightly by 0.2 percentage points to 91.2%. Analysts anticipate that Wizz Air will carry 18 million passengers in the first quarter, necessitating a 30% growth in passenger numbers for June. Aviation data provider Cirium projects that Wizz Air’s seat capacity will increase by 13.9% in June, compared to May’s 11% growth. This increase in capacity could result in a minor downward adjustment, less than 1%, in the forecasted passenger numbers for the fiscal year 2026. These developments highlight the airline’s ongoing efforts to expand its passenger base and improve operational metrics.
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